tv Bloomberg West Bloomberg November 21, 2014 6:00pm-7:01pm EST
>> live from. three in san francisco, welcome to bloomberg west will be cover innovation in the future of business. roaddent obama hit the to drum up support for his immigration plan. he spoke at a high school in las vegas. >> when i took office, i committed to fixing this broken system and a began by doing what i could to secure our borders because i do believe in secure borders. over the past six years, illegal border crossings have been cut by more than half. do not let all the rhetoric for you -- fool you.
>> we will have more an immigration proposal impact tech companies. a federal judge says he will give final approval to apple settlement in the ebook price-fixing case. they will have to pay $450 million to as many as 23 million consumers. about $50 million of that is for lowers fees. successful, itis could be reduced to nothing. fcc chairman tom wheeler drop some hints on net neutrality. he says he wants to make sure that the new open internet tools are legally sound and will withstand challenges. he says he wants to write the rules quickly although the fcc has previously said the process will drag into next year. turner broadcasting channels are back on the dish network at least for the next few months. this comes after the company's recent interim deal in their heated dispute. willhort-term agreement keep the channels on dish will
companies try to reach a long-term solution. cory johnson has the lead story. >> now to the lead -- president obama's plan for immigration reform was not the widespread overhaul the tech industry was hoping for. absent, expansion of the visa program for highly skilled workers. the president did propose foreign-born students and recent graduates of the tech field to stay in the united states for more than two years. the president will direct the department of homeland security to make it easier for foreign-born opsin -- october 2 hours -- entrepreneurs to wrok u.s.the in the i spoke with willie brown to see what he thought. >> i thought it was long overdue. how many months ago did the u.s. senate by a large partisan vote, 68 senators, said we should solve the problem here is the way we can solve it. the house leadership headed by mr. boehner would not allow even
a debate to take place. the president needs to get the dialogue going. his action props that. >> there was a lot of criticism still raging about the use of executive order to do this because he could not get something through congress. in particular, right after an election where a lot of immigration reform candidates lost. >> the question is not so much about whether or not he is using the executive order or because you cannot get something done in congress, he is using the executive order the same way the executive order has been used by all the presidents inth this issue. politicians are amazing -- they are very reluctant to do anything that is really earthshaking and controversial. what 12 million or more people in this country and with five or 6 million of them in categories where they should already be in line, it is amazing how members
of congress will not do that. to president is empowered respond to questions and problems and that is why you have executive orders. he is exercising that privilege period. he has done it within the context of what the u.s. senate has artie past -- al ready passed. you want to act? you act and i will take my executive order back. >> republicans have been supportive of the program that lets people come into this country from overseas and work in technology particularly. you a political standpoint, broker a lot of deals in sacramento with contentious thinge -- leaving that that both republicans and the tech community and democrats want to see happen hanging out there, do you see that as a negotiating ploy? >> it is part of the leverage.
you understand what the president did by virtue of his conduct. people who were born here to parents of those who were illegaly immigrant so to speak, that birth gives you a right. we should keep that family together. while i am not giving them citizenship, i am allowing to declare themselves, pay taxes, fill out the forms and get in line and wait for the opportunity to be a citizen. that is an appropriate thing to do. the sexy performance category of high tech workers getting special visas, that is something that everybody can sign on. the president is going to be willing to trade his signature on that for the consideration for these people who have no leverage. >> it is interesting that his focus on poorer people or without the means the lobby and not so much the economical
impact on workers which i think a lot of people thought they might hear from him. >> he did not do anything to slow down the process by which tech workers now qualify. you just did not do anything to accelerate it. in the tech world and some republicans' world, you accelerate that because we are taking the cream of the crop. to allow them to work and be productive in our nation. it applies not only to that crowd, it applies the people in the health care world. all of that leverage needs and no one to speak for them. these people who mr. obama spoke for last night are people who need a voice. >> we have some sound from president obama's speech. >> the actions i am taking are not only lawful, the other kinds of action taken by every single
republican president and erasing a democratic president for the past half-century. to those members of congress to question my authority to make our immigration system work meter or question the wisdom acting where congress has failed, i have one answer -- pass a bill. >> that really speaks to the politics in washington right now. >> i am sorry he did not do this like 68 months ago. -- six or eight months ago. why would you leave it out there when the congress has artie past it -- already passed it. ani think president obama is incredibly cautious executor, so to speak. he really tries his best to allow people to reach a consensus before he steps out of there. he has never been known for being the guy that initiates the action before there has been any real serious discussion.
he is now in a position with two years left where he needs to do if he is ever going to do it all. >> for the technology and businesses who want to keep him waitingere, six months is a big deal. the company is a missed a lot of opportunities. >> it is a long time coming but it is here. he should've done it months ago. >> former san francisco mayor willie brown. coming up, aereo is filing for bankruptcy. will another player step up to disrupt the tv industry? we will talk about that next on bloomberg west. ♪
bloomberg west. the iphone 6 and the iphone 6 plus went on sale back in september 19 but many customers are still waiting to get their grubby hands on the device two months later. the 16 gigabyte iphone 6 plus is now shipping an average of seven to 10 days in the u.s. but some stores are taking an average of three to four weeks. does apple have a serious supply problem or is it about demand with the holiday shopping season all around the season? turning now is gene munster. specifically, i ordered -- no diss to our android friends -- i ordered that android six plus -- iphone 6 plus and it took me six weeks to get that thing. is that a common experience? >> it is. there are certain carriers that have better inventory but it has been really tight. the reason is the demand seems
to be better than what people have thought. it is always hard to figure out which is what driving. it is one thing we can do which is the measure at the apple store is how much inventory they have a phones. typically, two months after a product launch, they should have 100% of the skews and right now it is about 60%. it is the lagging. surprisingly, two months after the release, it is still not widely available. >> are there certain components of the iphone 6 and iphone 6 plus that suggests you it is not a supply issue? that it is commonly available? >> the components that they have -- i think the components are relatively easy. based on some of the comment that apple had in the last conference call, they didn't say there is any issues they had on the production side. the was not anything that was dramatic on the component side. as of the third week of october, things were fine.
unless something really short-circuited in the last few thinkwhich is unlikely, i it is probably driven by continued healthy demand. >> is the six plus worse in terms of supply? what does that mean for apple's margins? we've actuallyy, seen the six plus supply improving and the six supply is actually tighter. what we think is going on is that if you look at the early adopters tend to spend a little more and get the bigger formfactor. i think we are slowly going into more mainstream. that is probably why you are single little better availability of the six plus and a little tighter availability of the six. a year from now, it is probably going to be 60% to 70% of units are going to be the smaller iphone 6. >> and the smaller margin? >> the margins is comparable.
it might be fractionally lower. the gross profit dollars are less with the six because the asp is lower. in apple's case, they are happy to sell either one but they would be happier to sell you the six plus. >> does this matter for apple? to selly going everything that made during this quarter anyway or do you think this is materially enough that they will have a much better quarter? there is a governing factor on how big the december quarter could be and that is the supply side. i think the idea of having some gang buster december is probably not a reality. they probably had a good sense of what they can produce when they gave that guidance back in october. the reason why this is important is because this really pushes the cycle into 2015. for investors, that is the big
question. when i get off at based on when the peak of the cycle is. having another potentially strong quarter is something that is material for investors. >> that quarter is often weak -- weakre quarters for apple historically. >> usually we see that march quarter is a big step down. especially this year where you have the launch, there is not a ton of catalyst happening. getting some of this demand really shifted over into the march quarter should be positive. what it comes down to is there is guidance -- their guidance for march should be more optimistic. we will get that in the third week of january. >> we shall see. it is an interesting story. gene munster, thank you as always.
>> welcome back to bloomberg west. many social enterprises, for-profit companies, are driven by a social mission. they are finding their startup capital through crowdfunding. the crowd is looking for more than financial returns and maybe the funding vehicle needed to get some of these great ideas off the ground. about the kind of
campaigns she is seeing on the crowdfunding platform. take a listen. >> we are seeing a broad spectrum. we are seeing social innovators, inventors that want to launch their products and businesses. we have seen musicians and artists using indiegogo to go on tour. they are asking a lot of nonprofits and individual ways of money for personal causes like paying for a funeral. >> i want a social on those -- i want to focus on the social impact. it seems that investors are fundamentally seeking a return. the investors you are bringing in are sometimes seeking more than that. they want to do good and do well. we all want to do that. like are seeking campaigns a young company creating dolls that are emulating scientists. >> barbie was not a famous female scientist?
>> apparently not. it is quite exciting because they have used it as platforms to connect with their funders about what golf to create next. like the first african-american female pilot. they have such a love of their story for the girl dolls but they are fictional storiesm m,, not -- >> great pioneering women that we have not heard about. care patch is a great idea. it is a patch that is on your shoulder. it makes you invisible to mosquitoes. it is an alternative to the mosquito nest in the developing world. they really launched the brand and product into the market. >> are these the kind of ideas that would not get venture backing? what is it about these platforms that are bringing these investors? >> it is actually not investing,
it is contributions in exchange for perks. we call them the four p's. people, passion, participation and perks. the first two are more altruistic in the second two are more selfish in nature. it unlocks all the motivations and that is why you see so many social impact businesses being very successful. >> we have a fifth p. phony. i wanteds an investor, i find short stakes -- when look at this platform, and concern about the possibility of companies. understand the legal ramifications but what you do to get rid of that? -- givingeve in open everyone an equal opportunity to get off the ground. we built the fraud infrastructure in the backend to
catch anything suspicious. we use data science to do all that. we know that we are unleashing new ideas and innovations with the definition of creating something new that is ever existed. >> there have been criticisms of companies. like a company that is a very controversial campaign that didn't do what it was thought it was going to do. there is suspicion that people use other things like promise magical cures or something to raise money and take the money. >> i think it is all about being transparent. we want to talk about what your goals are, what you are trying to achieve and why you are raising money this way. we use it as a way to get a feedback as whether it is a product people actually want. it is a very open ecosystem. nobody is forcing anybody to fund. something that is too out there and not quite
comparable with the signs, they don't need to fund that if they are very excited, they should at every right to fund it. funder know what you want. reach out to the campaign owners to understand the plans to see how they are trying to achieve it and create breakthroughs. >> when you look at the social campaigns that have happened, what does that do to -- how do you make more of that happened? sharecontinue to everybody stories. leave the campaign open so people can educate their funders on the status of the project. community tothe form ideas and be part of the next product. >> that was the indiegogo cofounder. amazon is changing the rules for workers at its warehouses but still faces demands for better wages and fair working conditions. what rights to the amazon workforce have now that the
changes have been made and is the company still abusing its power? we will talk about that next. you can always watch us streaming on your tablet, phone and bloomberg.com. ♪ >> time now for on the markets. let's get you caught up on where stocks traded today. thank you china and europe. that is what u.s. markets said. the s&p index got a fifth weekly gain after europe signaled additional stimulus. the nasdaq closed off a quarter of a percent.
>> you are watching bloomberg west where we focus on innovation, technology and the future of business. ir quest to looks the disrupt the tv industry -- they are toast. aereo's service violated program copyright protections. joining us is david bank. david, this aereo thing has got a lot of attention. consumers seem to really love this thing. what is the laughing take away of the end of aereo? was a really
interesting product from a consumer utility perspective. i don't know how many subscribers there were ultimately. i think the court documents discussed some of the subscriber-base. showed it was not enormous. i think that change in the media is painful. there is clearly an innovators thdilemma. it seems to come from outside the system. i think aereo's contribution was probably a push. a push to continue to make the media evolved to see some of these a la cart products. cbs all access, over-the-top products. could that have been a catalyst or even the hbo over-the-top products? i think they were a catalyst but ultimately, you know, they were sort of -- they didn't fit
within the regulatory landscape but maybe they helped to push change the regulatory landscape. >> i wonder if it is regulatory or the businesses themselves. the networks or try to keep people from consuming their service in the way they want to consume it. i wonder how long they could fight that off. is there another aereo around the corner is the way they died scared any potential followers from doing this again? >> look, if consumers really want to consume the broadcast networks on a standalone basis, they could just but roberrabbit ears up. i think part of it was really about a lighter bundle. what if i just want to broadcast networks and don't want the rest of cable and want the utility of modernis distribution? i think you are starting to see osome of that. charlie urgen will launch his
plan on dish. you are seeing sony platform and rumors of others for some of the telecom players. i think they are being pushed. i don't think they would be evil thing without this kind of this russian from without the system -- disruption from outside the system. ultimately, the consumer wins. the existing ecosystem pushes back as hard as it can and then the consumer wins. i don't think the guys of the telegraph company were thinking, w likehoa, we need a bunch of telephones. >> my big buggy investment is not working either. we talked about this notion of the consumer demand back in march. listen to what he had to say. >> my last company was measuring viewership. we used the collected data from millions of homes.
when you start looking at the ata, it is shocking that majority of the people watch seven or eight channels and half of them happen to be broadcast television that are free to air. prices keep escalating, technology does not keep pace. people are consuming more content online. people are cutting the cord and expressing their interest in moving away from the traditional model. >> what is interesting to me is he went after the belly of the beast as opposed to nibbling around the edges in awa way of maybe uber might. approach ofthat dismantling big regulatory environment is destined to fail. >> when you think about the players involved. barry diller was ultimately the money behind this. i think barry was not afraid of a big battle at the expense of some massive disruption. they were already to live with a really binary outcome.
with the promise of massive disruption. they didn't bite around the edges, they took the big swing. but, there was a potentially fabulous binary outcome for them if they were right. i think they are willing to live with the risk of being wrong. what chet was saying was probably correct in the average consumer does really probably watch the bulk of its content through eight or nine channels, the issue that you have -- i think the flaw and the logic -- is that those eight or nine most probably do watch the broadcast networks. those other five channels are different for everybody else. it is the bundle. like my five are different from your five. without the bundle, it is really hard for all these niche channels to exist. that is the challenge. at the end of the day, some of
this is a solution looking for a problem. the bundle is a pretty good solution. >> david banks, thank you very much. here is a question. are labor dispute surrounding amazon warehouse workers affecting the bottom line? that and more when bloom berg west returns. you can always watch a streaming on your tablet, phone or amazon tv if you are so inclined. ♪
>> you are watching bloomberg west. amazon has just settled a complaint with the national labor relations board. they agreed to change its rules to allow warehouse employees to communicate about pay and talk about their own work conditions without fear of retaliation. the u.s. supreme court considered a separate suit where amazon workers are considered to be paid for security checkout lines. brad stone, author of a great
book called amazon, the great store is joining me. zeb, let me start with you. is this a notable decision or settlement? >> it is notable because the provisions are ubiquitous. of thethe parts settlement requires amazon to change and update its code of conduct which is overbroad. it prohibits employees on its face from talking to anyone for distributing unauthorized information to people who are not authorized. on its face it would prohibit them from talking to unions about their pay and the terms of their work. those provisions are ubiquitous. a lot of employers have those terms in them. the fact that this settlement is news and there are a lot of
employers with those kinds of overbroad provisions, i think that is a piece of interest. >> maybe this resonates beyond amazon. the culture of amazon is fascinating. you can see amazon going big into these things. when you go to these the division centers, performance center's -- the film and centers, it is anything but. any ofst time i visited these massive warehouses with row after row of stuff and people walking miles, tens of miles a day picking these things and putting them back in, it looks like backbreaking, exhausting work. it may be thank god i went to college. >> i don't think this brings those workers any closer to unionizing. what we have seen over the past 15 years as amazon paying any unionization effort tenaciously. firms, making his case very strenuously to workers. you have to figure how they are
set up. they have 40,000 workers in the u.s. but they hire 80,000 temporary workers during the holidays. ofre is a vast reservoir replacement people back and take your job if you talk to the teamsters. there was a group that tried to unionize earlier this year in delaware and they got crushed. the vote was 21-6. you are not on very stable ground. this will increase the education of workers rights but i am much or amazon will be that much more vulnerable. >> i completely agree with that point. amazon has worked very hard over a very long time to prevent unionization, even very small ones. the machinist union has tried to gain toehold. again, amazon takes those toehold efforts very seriously because they see them as being
chips that could be laid out for future effort. you can say this particular one even though it was not anything one employee ins an arizona warehouse that complain about the fact that he was reprimanded allegedly for complaining about lack of security in the parking lot which affects a lot of people in the warehouse and their security. he also complain about these overbroad policies. you can say that is not really a victory and even though they settled it. you can say it is a nice toehold for unionization efforts because it shows with one person and minimal effort, they got the mighty amazon to capitulate in certain respects. that is a nice toehold. you can see past efforts being unsuccessful and this being a little more successful. i don't want to sound too optimistic. amazon - -wh- why
does amazon have roles that they can't let a guy talk about parking lot security? >> they are very fearful of any union aizing action. they would say they prefer direct relationship with their employees. they are relying on $13 an hour wage on a very low margin business. they like to hire up nd staff estaffholidays -- and d after holidays. they don't have that lets ability if they are unionized. >> is that more enough of a threat? there are robots. they bought this robot company. what the you make of the move to use robots and automated their factories? >> robots probably complain a lot less about lack of security. that is one way that amazon would on its face if they
replace employees with robots, they would prevent the problems of unionization. amazon is more bricks and mortar that a lot of people think. they think of amazon is an internet company but they do have a lot of employees nationwide. fear of unionization is something that will drive them towards creating robots -- a robot workforce. i think that is not what is driving them. there are other costs that are associated with human capital. the fear of unionization is probably not something that is pushing towards that effort. >> i talked about what it was like for me thinking about my nyu education when i saw the fulfillment center. what do you see when you see that? >> they are not so fulfilling. i am happy that i am not working there. they are difficult jobs. this might be an instance where we think the collective voice in
the workplace is a good thing because these are people that theirnot be able -- ony own represent their interests. in their not unique response to unionization efforts by saying you don't want a third-party intermarry coming between us. it is like a lover saying, no, keep it between us. which i find very odd and very weird that a company could think that this plea would work. it should just be between us. i find that odd that anybody would find that an effective argument. >> new york university professor and brad stone. thank you. agriculture. we will introduce you to one startup that is hoping to soften some of the world's food challenges by growing plants in the air. that is next. ♪
way to grow food without soil. you play a major role in improving the nation's food supply. this is the year ahead. >> we truly believe disrupted technology for the farming industry. we are talking about feeding a planet -- 8 billion or 9 billion -- we need a new paradigm of how we grow our food. this is it. this is the future. nightcluban old in new jersey, they are on the verge of an agriculture revolution. >> we can take that seat and grow it in 16 days which otherwise takes 30. we have 22 crop turns in the year. we can do that using 95% less water. zero pesticides, fungicides. doing aare using it by
system that plans grow in missed. -- mist. >> we have a trade that is covered. this foroth is our growth medium. to 48 hours later, that tray is sent into vertical farms and moves further through the system as the plants grow bigger. >> they are given very specific spectrum of light. where optimizing oxygen, cop ph,bon dioxide, relative humidity to create a perfect growing environment for the plants. >> beneath the lights and greens is a system of nozzles that spray mist. just over two weeks after the process began, the plants are ready to harvest and be eaten. >> we have grown 230 different products. the taste is fantastic.
we optimize for taste and texture. arugula,nt a peppery we're looking at all those factors. >> right now, a vast majority of leafy greens in the u.s. are grown untraditional forms in california and arizona. plants are doused with pesticides which end up not only in our food but in our environment. >> about70% of our freshwater contamination comes from agriculture. it is the runoff of all the fertilizers and pesticides that go to our freshwater streams that lead to outdo blooms, dead zones. after harvest, leafy greens require immediate refrigeration and shipping all over the country. it is a flawed system that high rates of spoilage and contamination which is why they are bringing the farm to the city. company's vertical
systems is already in use at phillips academy charter school just across downtown newark where growing leafy greens outside in winter is impossible. >> we are harvesting the plants right now. we are try not to get a lot of stem. >> we are about enabling local food production at scale. a high trend towards urbanization. >> it really taste like grown locally to a new level. >> they are going through a massive expansion. they are currently converting an 80,000 square foot factory into what will become the world's largest vertical farm. they say it will produce enough leafy greens for 80,000 people. cheap and that is the big challenge. >> depending on the size of the farm, it could be tenley and $10 million or
$20 million when you take in the capital of the farm. >> it is a cost that is cap of them out of the places in the world that may need it the most. >> the technology is a viable technology that works. we will do everything we can to make it available all over the world. >> for now, they are keeping their focus at home trying to reach local customers only a few hundred miles from the new facility. in 2015, they will be launching a branded part sold at places like this ensuring that your peppery arugula was picked just hours earlier. >> that was sam grobart. you can watch the special all weekend. it is time for the bwest byte, one number that tells us a lot. my special guest is nick evans. what is the number? >> 10 is the number -- number of rainy days in san francisco. potentially, the number of umbrellas you have if you cannot
find one. >> i have this umbrella here with this logo on it. it is a cool little product that has a chip in it. what is with the umbrella partnership? >> we partner with broad umbrella's -- bvlunt of relative. they are trying to make the world's first smart umbrella. often people leave their umbrella somewhere. >> when i was a cab driver, my friends would come to my place. i would have dozens of umbrellas whenever it was raining because people leave it in the back of their cabs. you are putting your technology and other things. >> we believe if you purchase something, you should own it. you should be bold to find it when you you want to use it. >> thank you very much. good stuff as always. you can watch more of bloomberg west throughout the day and evening. during the day. thank you for joining us.